EAT AT MY RESTAURANT - CASH FLOW
With this case, we review the cash flow of several restaurant companies. The restaurant companies reviewed and the year-end dates are as follows:
1. Yum Brands, Inc.
December 25, 2010; December 26, 2009 (52 weeks each year) "YUM consists of six operating segments: KFC - U.S., Pizza Hut - U.S., Taco Bell - U.S., Long John Silver's ("LJS") - U.S., and A&W All American Food Restaurants ("A&W") - U.S., YUM Restaurants International ("YRI" or "International Division") and YUM Restaurants China ("China Division")." 10-K
2. Panera Bread
December 28, 2010; December 29, 2009 (52 weeks each year) "Panera Bread Company and it subsidiaries, referred to as "Panera Bread," "Panera," the "Company," "we," "us," and "our," is a national bakery-café concept with 1,453 company-owned and franchise-operated bakery-café locations in 40 states, the District of Columbia, and Ontario, Canada." 10-K
3. Starbucks
October 3, 2010; September 27, 2009 (Fiscal year 2010 included 53 weeks, while fiscal year ended 2009 included 52 weeks) "Starbucks is the premier roaster and retailer of specialty coffee in the world, operating in more than 50 countries." 10-K
Required
a. Comment on the difference between net cash provided by operating activities and net income including noncontrolling interest. Speculate on which number is likely to be the better indicator of long-term profitability.
b. Comment on the data reviewed for each firm.
c. Do any of these firms appear to have a cash flow problem? Comment.